Grenada: Macro-socio-economic assessment of the damage caused by Hurricane Emily


Executive Summary
The Process

This study to undertake a Macro-economic and Social Assessment of the effects of Hurricane Emily on the performance of the Grenadian economy, only ten months after the passage of Hurricane Ivan, was requested by the Prime Minister Dr. the Hon. Keith Mitchell. Discussions on logistical details were subsequently held with the Permanent Secretary in the Ministry of Finance. In order to prepare for the conduct of the assessment, the Director of the Social and Sustainable Development Division and the Senior Communications Officer in the OECS Secretariat visited Grenada on the 17th and 18th of July. The assessment team was then assembled and mobilized by the 20th of July, six days after the hazard event.

The assessment is based on a methodological approach formulated by UN-ECLAC and refined to suit the needs of Small Island Developing States. In May of this year the OECS Secretariat, with funding provided by UNDP, sought to train additional staff from the Secretariat and staff from Member States in the use of this methodology. An interdisciplinary cadre of persons is therefore now available, within the sub-region, to undertake such assessments.

The Director of the Social and Sustainable Development Division led the OECS Assessment Team; the Technical Coordinator of the Team was the Head of the Macro and Sector Policy Unit in the Secretariat. The eleven person Team that was fielded comprised of eight persons from the OECS Secretariat, one each from Anguilla and Montserrat, and a specialist from the IICA Office in Saint Lucia. The assessment took place in Grenada over the period 26th July to 1st August 2005. Three persons from the team also undertook a two day assessment of the damages in Carriacou;in addition, one of the team members traveled to Petit Martinique to assess the damage on that island. The report was presented to the Prime Minister and Cabinet colleagues on 2nd August.

The assessment analysed and computed the direct and indirect effects of Emily on the economy. This allowed the team to project the impact of the damages on overall macro economic performance and to identify recommendations as the basis to guide the continued rehabilitation and recovery of the economic, social and environmental sectors. Every attempt was made to ensure that only the increamental damages caused by Emily were accounted for. In a number of instances the damages, especially to the infrastructure, appeared to be more than what has been accounted for in this report. These damages are, however, cumulative damages, having been sustained by Hurricane Ivan and then being exacerbated by Emily.

It was clear from the scope and scale of the damages sustained that the infrastructure (including housing and roads and bridges) and agriculture sectors had suffered the brunt of the damages. Damages to the tourism sector were not as significant as originally assumed. Site visits and interviews also revealed that:

  • The damage to the infrastructure was a result of the loss of vegetation caused by Hurricane Ivan: The ten-month period between Ivan and Emily was not sufficiently long enough for the natural rehabilitation and recovery of watersheds. This in turn has resulted in heavy sedimentation of rivers, erosion and gullying of riverbanks, land slides, etc.

  • While many of the primary roads still remain in good condition, a number of the secondary roads and farm roads have sustained damage which, if not mitigated, will lead to further damage of infrastructure. Similarly, if a programme for rapirian remedial works is not instituted with haste, flooding and loss of housing stock along the riverbanks are predictable events.

  • Watershed management is critical if flooding, sediment loading of the rivers and nearshore waters is to be minimized..

  • While the extent of hillside cultivation since Hurricane Ivan has not been ascertained, such cultivation, if not accompanied by appropriate cultural practices - contour planting, contour drainage; terracing; planting of elephant grass along contours - will lead to further degeneration of watersheds. Similarly, if comparable cultural practices are also not utilized for houses built on hill slides, more land degradation and riverbank erosion is foreseen.

The Report

The report undertakes a sector-by-sector analysis of the impact of Hurricane Emily; an assessment of overall damages is then computed. Sectors are grouped into four categories: Social, Productive, Infrastructural and Environment. The first includes the housing, health and education sectors. The second comprises agriculture, manufacturing, wholesale and retail, and tourism. The third includes electricity, water and sewerage, telecommunications, roads and drainage, coastal infrastructure, sea and airports. The environmental assessment includes, among other things, the impact of damages to watersheds on water quality and coastal resources; ecosystem and habitat damages, and implications for solid waste management - an important factor, given the tremendous amount of debris which was accumulated after Hurricae Ivan and which remains to be disposed off.

In each of the sectors, a distinction is made between direct and indirect damages. Direct damage refers to losses to assets and stocks at the time of the disaster. Indirect damage is defined as losses in flows (income and production flows following the occurrence of the disaster). Estimates of direct and indirect damages for the economy as a whole are then presented in summarized format. Their magnitude is evaluated in relation to macroeconomic aggregates. The overall computation of the damage also includes a detailed macroeconomic assessment of the situation prior to the disaster, the projected macroeconomic performance without the disaster, and estimated economic performance of the economy as a result of both the direct and indirect costs and effects associated with Hurricane Emily.

The report concludes with a presentation of guidelines for a rehabilitation programme that builds on the recommendations that had been provided by the OECS Secretariat after it undertook the assessment of damages caused by Hurricane Ivan. As was previously mentioned, of critical importance is the need to reduce vulnerability and increase resilience at both the community and national levels to any hazard event. Recovery and mitigation must be married with strategic policy interventions aimed at managing risks. A portfolio of projects aimed at facilitating the recovery process, is also included in this report. Careful attention was paid to ensure that the recommendations and the project profiles contained in this report are closely aligned with the activities and interventions already identified in the Strategic Plan of the Agency for Reconstruction and Development and with the national budget.

The Effects

The effects of the damages are significant mainly in respect of the fiscal accounts. They amount to 12.9% of the current value of GDP. The most important component of overall damages, losses or costs is the direct damage. In relative terms the overriding damage is concentrated in the housing sector. The natural environment was also severely impacted, and that effect is partially integrated into the damage estimates for roads and bridges and agriculture. This damage to the environment has potential medium to long term effects on infrastructure and the productive sectors if a comprehensive set of mitigative measures are not implemented in the short term.

The damage also has important implications at the social level, firstly since it has affected some sectors that are labour intensive, in particular agriculture, but also because of the compounded psycho-social impact occasioned by hurricane Emily, coming as it did only ten months after the devastation caused by hurricane Ivan. The effects of hurricane Emily will only have a minimal impact on employment if farmers, in particular, can be sufficiently motivated to restart and in some cases redouble their efforts at restoring the source of their livelihoods, but also if existing unemployed skilled labour can be rapidly retooled to service the manpower needs of the construction sector, especially in the short to medium term.

In the year in which hurricane Emily occurred (2005) overall GDP is projected to grow at a rate of approximately 12%, down from the 13% projection post-Ivan, which had captured the twin impacts of disaster-induced growth in the construction and wholesale and retail sectors, and partial recovery of tourism. Post-Emily, the construction and wholesale and retail sectors will expand a bit further, due to the additional reconstruction and recovery efforts required in the housing and road transport sectors, thereby compensating for the expected slowdown in the agricultural sector . In 2005, agriculture, the productive sector most affected by Hurricane Emily, is expected to decline by 43%, a further deterioration on the post-Ivan projected rate of decline of 36.1%.

The total damage ( direct and indirect) caused by hurricane Emily is estimated to be about EC$ 140.0 million, that is about 12.9% of the current value of GDP. The bulk is concentrated in direct damages. These account for 87% of the damage or 11.2% of GDP.

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